KfW Bankengruppe highlighted issuance on both sides of the Tasman Sea during the last full week of February, with a NZ$400 million (US$292.5 million) five-year Kauri deal followed by a A$300 million (US$235 million) five-year Kangaroo. Elsewhere, Bluestone Group became the first Australian nonbank issuer to price a deal in 2018, printing a A$250 million residential mortgage-backed securities transaction.
In the wake of the first nonbank securitisation deal of 2018, issued by Bluestone Group (Bluestone) on 20 February, issuer and lead managers insist investor appetite remain robust. They say that after a bumper year of issuance in 2017, the sector is primed to build on last year’s momentum.
The Kauri market is showing signs of building on the positive start achieved by supranational, sovereign and agency (SSA) issuers in 2018. Market sources also say a favourable move in the New Zealand dollar basis swap has improved Kauri economics for euro-denominated issuers such as KfW Bankengruppe (KfW).
Late in the Sydney day on 22 February, Asian Development Bank (ADB) (AAA/Aaa/AAA) launched a minimum A$100 million (US$78.4 million) increase to its August 2028 Kangaroo bond. Indicative price guidance for the forthcoming transaction is 42 basis points area over semi-quarterly swap and 47.05 basis points area over Australian Commonwealth government bond. Pricing is expected on the day after launch, according to lead managers Deutsche Bank and TD Securities.
The Australian Office of Financial Management (AOFM) completed its 11th and final residential mortgage-backed securities (RMBS) divestment auction on 22 February, with the securities sold representing the remainder of the portfolio. The total amortised face value sold was A$312.8 million (US$244 million) from five tranches originally issued by Bendigo and Adelaide Bank, ING and ME Bank.
Oesterreichiscche Kontrollbank (OKB) has will increase its 2027 Kangaroo bond by a minimum of A$20 million (US$15.6 million) according to a 22 February announcement. TD Securities is leading the increase, which is being marketed at 61.75 basis points over Australian Commonwealth government bond or 56 basis points over mid-swap and is expected to price on day of launch.